October 12, 2017     

LEGAL TO PLAY ONLINE GAMES?

 

With the booming development and easy accessibility to smartphones, the online gaming industry has made its mark in the Indian market. The online gaming industry in India is expected to grow at a very high rate by the year 2020.

 

The legality of the game is assessed against the touchstone of the extent of skill involved in it. The Indian law has classified games into two broad categories viz. game of skill and game of chance. The Supreme Court of India, vide a catena of cases, held that the games involving some amount of skill are legal ,while those involving only chance are not legal to play. Thus, unless a game is purely a game of chance it is not illegal. Although games may involve chance, it does not mean that they are completely devoid of skill. Games that require certain degree of skill are not illegal as using skill is the criteria of winning the game.

 

Gambling: Legal or Illegal?

 

The Black’s Law Dictionary defines Gambling as making a bet. It is a play for value against an uncertain event in the hope of gaining something of value. Gambling consists of a consideration, an element of chance, and a reward. The element of gambling are payment of a price for a chance to win a prize.

 

Gambling is said to involve the element of betting or wagering. Under the provisions of the Contract Act, the agreement by the way of ‘wager’ is void and thus unenforceable. The Supreme Court [State of Bombay v. RMD Chamarbaugwala A.I.R., 1957 S.C. 699] held that:

  1.  the competitions where success depends on substantial degree of skill and not 'gambling' and

  2.  despite there being an element of chance if a game is preponderantly a game of skill it would nevertheless be a game of 'mere skill'.

In another case, the Supreme Court held that a game of skill, although having the element of chance is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. It was concluded that games like golf, chess, and rummy are considered to be games of skill. [K.R. Lakshmanan v. State of Tamil Nadu 1996 SCC (2) 226]

 

Monitoring Gaming in India

The provisions of gaming and gambling in India are covered under the subjects of State list and thus are under the exclusive domains of the State legislations some of which are as follows:

  • Delhi: Being governed by the Delhi Gambling Act, 1955 identifies gaming to include wagering or betting except wagering and not games based on skill.

  • West Bengal: The West Bengal Gambling and Prize Competitions Act, 1957 is only applicable to games comprising of wagering or betting. The said Act does not bring into its purview skill based games.

  • Assam: The Assam Game and Betting Act, 1970 prohibits any game involving betting or wagering altogether.

  • Orissa: Any sort of betting or wagering is not permissible under the Orissa (Prevention Of) Gambling Act, 1955.

  • Goa: Goa makes gambling legal on land and even off-shore, but only for Five Star establishments which have a government permit/license by the provisions of Goa, Daman and Diu Public Gambling Act, 1976.

Online Gaming in India

Online gaming in India is covered under the provisions of the following State legislations:

  • Sikkim: The Sikkim Online Gambling Rules, 2009 legalized the playing of certain online gambling games to be legal within the premises of the State.

  • Nagaland: In a first of its kind approach, the Government of Nagaland has started the process of issuing online skill games license under the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 and the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Rules, 2016. The first license has been issued to M/s K365 Web Assets Pvt. Ltd., which operates the online poker website khelo365.com after complying with the necessary formalities and paying the requisite annual license fees.

  • Telangana: The State Government issued Telangana State Gaming (Amendment) Ordinance, 2017 (Ordinance No. 6 of 2017) which has included within its definition for “Wagering or betting” any act of risking money, or otherwise on the unknown result of an event including on a game of skill and thus prohibits such games. The said ordinance considers online rummy as illegal to play.

Enforcement of Online Gaming Laws in India

The law regarding the governance of skill based online games remains in the grey area. Although the courts have observed that the skill based games are exempted from the purview of gambling, the District Court of Delhi opined that when skill based games are played for money in virtual space, the same would be illegal and observed that the degree of skill in games played in a physical form cannot be equated with those played online as the degree of chance substantially increases because various manipulations including the randomness, inside cheating, collusion cannot be ruled out, when the same games are played in the virtual space.[Gaussian Network Private Limited v. Monica Lakhanpal and Another]

 

Conclusion

Since, the Judiciary has well established the fact that wherever skill is involved in playing of a game, it would not be gambling or illegal to play even though it may also rely upon chance or investment of stakes.

 

Gaming and Gambling being under the ambit of State Legislation to be governed upon, it should be appreciated that the change of media upon which such games are played to say online mode does not alter their very nature of being skill based. Thus, where specific laws for online games are absent, the provisions of the available gaming laws should be enforced to ensure that playing of skill based online games does not amount to gambling or illegal activity.

 

In order to ensure clarity on the gaming provisions the State of Nagaland brought forth its legislation to regulate online skill based games which licenses the online gaming portal providing such services. It seems as progressive approach in order to safeguard the interests of such gaming portals against the ambiguity of their activities being perceived as being illegal.

 

It is worthwhile to note that the concept of online gaming in India is very nascent and the present legislations still remain insufficient to counter the problems posed thereunder. Despite the existence of Information Technology Act, 2008 which restricts the browsing of sites it remains an insufficient remedy to cater to the requirements of online gaming regulations. The horizons of online games go beyond the barriers of the State limits and thus there is a dire need for such central legislations to control the overall framework and administration of the working of online games in India.

 

To know more about gambling laws in India, you may also visit here.

 

 

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